BILL ANALYSIS
SENATE JUDICIARY COMMITTEE
Senator Ellen M. Corbett, Chair
2009 - 2010 Regular Session
AB 483
Assemblymember Buchanan
As Amended June 25, 2009
Hearing Date: July 14, 2009
Insurance Code
BCP/GMW:jd
SUBJECT
Rating Organizations: Internet Web Sites
DESCRIPTION
This bill, sponsored by the California Labor Federation, would
require a licensed rating organization to establish and maintain
an Internet Web site in order to assist persons in determining
whether an employer has workers' compensation insurance. The
Web site would be subject to certain provisions, as specified in
the bill and adopted by the Insurance Commissioner
(commissioner). Rating organizations, and their affiliates,
would not be held liable for damages or injuries caused by the
good faith disclosure of information, or the accuracy or
completeness of that information.
BACKGROUND
Current employees may obtain worker's compensation information
either directly from an employer, or by request to the Worker's
Compensation Insurance Ratings Bureau (WCIRB). WCIRB, made up
of all companies in California that are licensed to manage
workers' compensation, collects and maintains information from
insurance providers regarding employers' insurance coverage.
However, according to the WCIRB Web site, information which can
be released is limited to certain parties. Employer-specific
information, including policy numbers and effective dates, can
only be provided to the policyholder and the policyholder's
insurer of record unless otherwise authorized by the
policyholder. Whether an employer has workers' compensation can
be provided to an insurer, an employer, an injured worker,
licensed health care provider, or an attorney working on a
(more)
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pending worker's compensation claim. However, prospective
employees seeking a prospective employer's workers' compensation
information are not given the same opportunity. This bill is
intended to address this issue.
Last year, AB 507 (De La Torre, 2008), a substantially similar
bill, was vetoed by the Governor. (See Prior Legislation.)
This bill was approved by the Senate Banking, Finance and
Insurance Committee on June 16, 2009, with amendments.
CHANGES TO EXISTING LAW
1. Existing law requires employers to provide workers'
compensation for injuries that are a result of employment. A
private employer may obtain a certificate to self-insure for
payment of workers' compensation by meeting specified
requirements and filing with the Director of Industrial
Relations (DIR). (Lab. Code Sec. 3700.)
2.Existing law authorizes the creation of a rating organization,
whose duties include providing information about workers'
compensation information and employer's liability insurance.
(Ins. Code Sec. 11750.3.)
3. Existing law requires every insurer to be a member of a
rating organization. (Ins. Code Sec. 11751.4.)
4. Existing law requires the WCIRB to provide to the DIR, upon
request, any information in its possession or reasonably
attainable that would assist the DIR in identifying employers
who fail to secure adequate workers' compensation insurance.
(Ins. Code Sec. 11751.7.)
This bill would require a licensed ratings organization to
establish an Internet Web site which would assist individuals
in determining whether an employer has workers' compensation.
The Web site would:
(a) allow a person to inquire whether a particular
employer has workers' compensation insurance, using the
employer's name, address, or other identifying information;
(b) provide the name of the employer's worker's
compensation insurer as well as the insurer's contact
information, according to the most recent information
available to the ratings organization;
(c) not charge a fee for workers' compensation inquiries,
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but the commissioner may enforce access restrictions, as
specified;
(d) include a link to the Department of Industrial
Relations' Web site so that employers who are self-insured
may be located;
(e) include certain disclaimers, as determined by the
commissioner;
(f) remain reasonably updated on policy information
submitted by insurers and include a disclaimer stating that
the Web site might not reflect recent changes in
information;
(g) include a disclaimer that if an employer does not
appear in the search results, such absence does not mean
the employer does not have insurance; and
(h) state when the Web site was last updated.
This bill would provide that a rating organization is not
required to supply policy numbers, effective/expiration dates,
or confidential information on the Web site.
This bill would require the Internet Web site to become
operative no later than 180 days after the effective date of
regulations adopted by the commissioner.
This bill would require that regulations adopted by the
commissioner provide a way that an employee may contest the
accuracy of information on the Web site, and those regulations
would be executed no later than January 10, 2011.
This bill would provide civil immunity from liability to
ratings organizations and their members, for the good faith
disclosure of information that leads to the injury or damages
of another party.
This bill would not be understood to create a liability,
except as otherwise provided, nor would be understood to
create legislative recognition of liability, of the ratings
organization.
This bill would further provide that nothing shall be
construed as limiting the authority of a rating organization
to disclose information contained in its record to others.
This bill would require that before July 1, 2013 the
commissioner provide a written report, evaluating the Web site
and whether it is fulfilling its intended goal. Copies of the
report would be given the President pro Tempore of the Senate,
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the Speaker of the Assembly, the Senate Committee on Banking,
Finance, and Insurance, the Department of Finance, and the
Department of Industrial Relations. The report would also be
available on the Department of Insurance Web site.
COMMENT
1.Stated need for the bill
The author writes:
Current law makes workers' compensation coverage information
difficult to obtain. Many times employers do not know, and
will not provide this information to workers. Workers can
only receive this information if they request it through
writing or e-mail from the Workers' Compensation Insurance
Rating Bureau (WCIRB).
AB 483 protects workers from employers without workers'
compensation coverage, and protects insured employers from
competitive disadvantages by uninsured employers.
Furthermore, the state could save money by handling fewer
inquiries because the information would be made available over
the internet.
2.Last year's AB 507, which is substantially similar to this year's
AB 483, was vetoed by the Governor
Last year, the Governor vetoed AB 507, stating that he "was
concerned that the website would not be required to post the
effective dates of coverage of policy," and that "the bill does
not contain any specified timing in which the information must
be updated." This year's AB 483 was introduced as a follow up
to last year's AB 507.
a) Governor's concern regarding the effective dates of
coverage is not addressed in AB 483.
Last year, AB 507 would have provided that the ratings
organization "shall not be required to disclose on the
Internet Web site any policy numbers, inception or expiration
dates, or confidential information, as defined by the
commissioner." However, the Governor was concerned that
failing to provide effective dates of policy coverage on the
Web site would devalue the information provided because users
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would be unable to assess the accuracy of the information.
With respect to this issue, the language in AB 483 is
identical to last year's AB 507. The author's office
indicates that it prefers not to amend the bill to include
expiration and inception dates of policies due to
confidentiality concerns. WCIRB and insurance brokers have
informed the author that such information is considered
confidential and a trade secret. According to an opposition
letter to last year's AB 507, from Insurance Brokers and
Agents of the West and The Zenith Insurance Company,
disclosure of such information would "infringe on the rights
of insurance agents and brokers to control proprietary
business information ? [and] is part of an insurance
producer's work product and reflects the investment the
agent/broker made when initially placing a policy."
According to the letter, the Commission on Health, Safety and
Workers' Compensation (CHSWC) has also recognized the
confidentiality concerns that accompany the release of policy
effective dates, referring to California case law which has
treated policy effective dates as proprietary. (State Farm
Auto Insurance Co. v. Dempster (1959) 174 Cal.App.2d 418;
American Credit Indemnity Co. v. Sacks (1985) 213 Cal.App.3d
622.)
Staff notes also that the Governor's concerns of assessing the
accuracy of information are partially alleviated by the
provision requiring the Web site to include the date that it
was last updated. (See Comment 2, subsection b.)
b) Timing in which Web site must be updated
Last year's AB 507 would have required that the Web site be
updated to "reflect policy information as soon as reasonably
feasible following submission of insurers." The Governor
expressed concern that unless specified timelines are
provided in which the Web site must be updated, inaccurate
information will be provided to Web site users.
In response to the Governor's concerns, AB 483 would require
the Web site to include the date on which the Web site was
last updated. That requirement would appear to provide
balance between supplying reasonably accurate information
regarding an employer's workers' compensation status and
allowing the ratings organization flexibility in the upkeep of
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the Web site.
According to WCIRB, state law requires that insurers submit a
policy to the WCIRB within sixty days after the policy
effective date, and are to report policy updates in cases of
added endorsements or policy cancellations. Once reported,
the WCIRB Web site is updated to reflect the new information
within 11 business days - 10 days to internally process, and
one day to update the Web site. The WCIRB has said that they
would be willing to establish a similar standard for this
bill's Web site. However, WCIRB would be hesitant to put such
a requirement into the statute without also providing for an
exception for unforeseen circumstances, such as a system
failure or computer error.
Listing the Web site's last update would appear to provide the
ratings organization with flexibility in maintaining the Web
site and leeway in cases of unforeseen circumstances, while at
the same time providing users with realistically accurate
information. Since the individual would be placed on notice
that the information may be out of date, he or she knows that
it may be necessary to check again at a later time.
It should be stressed, however, that this standard would only
be applicable to information that WCIRB has received and
processed internally. Therefore, any information that has
been not yet been reported to WCIRB will not be reflected on
the Web site. In particular, if an employer obtains
insurance, the policy may not be included in the database
immediately, as the insurer has up to sixty days to submit the
information to WCIRB. Any inquiry regarding that employer
during that time period would result in a report of no
insurance coverage. This issue is remedied by AB 483's Web
site disclaimers stating that search results may not reflect
recent changes to information, and the failure of an employer
to appear in a response to an inquiry does not mean the
employer does not have insurance.
1.Civil immunity provided for good faith disclosure.
Last year, this committee raised concerns about the broad
scope of AB 507's immunity clause for the rating organization
and suggested amending the bill to limit the scope to the good
faith disclosure of information. AB 507 was amended to
reflect those concerns.
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This bill contains immunity language that is identical to that
suggested by this committee last year.
Support : California Department of Insurance; California
Applicants' Attorneys Association (CAAA); California Federation
of Teachers; California Professional Firefighters (CPF); The
Teamsters; California School Employees Association, AFL-CIO;
California State Employees Association; Independent Maintenance
Contractors Association (IMCA); National Electrical Contractors
Association, California Chapter; California Legislative
Conference of the Plumbing, Heating and Piping Industry;
Worksafe; American Federation of State, County and Municipal
Employees (AFSCME), AFL-CIO; California Conference Board of the
Amalgamated Transit Union; United Food and Commercial Workers
Union, Western States Council; Engineers and Scientists of
California; UNITE HERE!; California Conference of Machinists;
Professional & Technical Engineers, Local 21; Strategic
Committee of Public Employees, Laborers' International Union of
North America; Los Angeles District Attorney's Office;
California Nurses Association
Opposition : None Known
HISTORY
Source : California Labor Federation
Related Pending Legislation : None Known
Prior Legislation :
AB 507 (De La Torre, 2008) is substantially similar to this bill
and this bill was introduced to address the Governor's concerns
about AB 507. (See Comment 2.)
AB 1883 (De La Torre, 2006) would have required a ratings
organization to establish, maintain, and update an internet Web
site for the purposes of assisting a person in determining
whether an employer is insured for workers' compensation and to
identify the past and/or present insurers of the employer. This
bill was vetoed.
Prior Vote :
Assembly Insurance Committee (Ayes 9, Noes 0)
Assembly Appropriations Committee (Ayes 12, Noes 0)
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Assembly Floor (Ayes 79, Noes 0)
Senate Banking, Finance and Insurance Committee (Ayes 9, Noes 2)
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